Capacity Black

A person I know is trying to sell me their gently used Apple iPhone 3G. It has an 8GB capacity, black, unlocked, jail-broken, and NOT stolen or refurbished. It comes with the USB cable, installed battery pack, and two rubber cases. She wants $499.99-$650.00 for it (best offer within this price range wins). The condition of the phone is not too bad, there are a few minor scratches on the back, but none on the screen. I can afford to spend about $500.00-$550.00, so is it worth it? How much is it really worth? Where can I find one cheaper? Thanks for the help, I appreciate it!!!